Most Birmingham Chamber of Commerce members support the rights of older people to continue working after the age of 65 if they are up to the job.

A survey found that 67 per cent felt that with increasing life expectancy, the issue of pensions provision and the potential to lose valuable knowledge and experience from the economy, it did not make sense to force out employees.

The Employment Equality (Age) legislation will come on stream in October and will mean that discriminating on the basis of age within the workplace will be outlawed.

It will be illegal to turn down applications for work or training on the basis of age, unless it can be proved that it is necessary under legitimate circumstances.

However, the legislation also sets a default national retirement age of 65, which means that if an employer has a policy of compulsory retirement at this age, subject to an appeal process, it is allowed to force an employee who is 65 or over to retire.

Commenting on the results, James Cooper, policy adviser at the BCI, said: "Business in Birmingham is now recognising that the working age population is getting older.

"It is estimated that 70 per cent of the 2020 UK workforce is now of working age. Locally, with 50,000 jobs expected to be created in Birmingham and Solihull by 2015, it's clear to see that many of these jobs will need to be filled by older workers.

"This, in addition to the pensions crisis within the UK, means that many more of us will need to stay in work longer. There are many business benefits in employing older workers and we recognise that many of our members use common sense when negotiating with their staff over issues such as retirement.

"However, we believe that it would be detrimental to Birmingham's economy if skilled and experienced workers who wanted to stay on were forced to retire by employers if they could still do their job to the required standard."

The Association of Chartered Certified Accountants is urging employers to review their employment policies if they haven't done so already.

John Davies, head of business law at ACCA, said: "Larger employers will be confident about complying with this new legislation, but perhaps small businesses will not be in that fortunate position."